MoviePass owner to spin off embattled subscription service

MoviePass has struggled to make money, even having to borrow $5 million in July to keep the business afloat.

Cassie Langdon uses to her phone to launch the MoviePass app to see what movies are available at AMC Indianapolis 17 theater in Indianapolis.Darron Cummings / AP file

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Oct. 23, 2018 / 1:26 PM GMT / Updated Oct. 23, 2018 / 1:43 PM GMT

By Jason Abbruzzese

The owner of MoviePass announced on Tuesday that it is spinning off the troubled movie subscription service into a separate public company.

The new company, to be called MoviePass Entertainment Holdings, will try to become a more complete entity with movie production and marketing businesses, said Helios and Matheson, the owner of MoviePass, in a press release.

MoviePass has gone through a variety of ups and downs in the past 18 months. Though the company had been around since 2011, a price cut to $9.95 per month in August 2017 — which allowed users to see a movie in theaters every day as long as tickets were bought on the day of the screening — drew a wave of customer interest.

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Ted Farnsworth, Helios and Matheson chief executive officer, said in the press release that the company's ownership of MoviePass had begun to overshadow the rest of its business, which is "focused on data analytics."

"Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public’s eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company,” Farnsworth said.